Features

The Age of Corporate Purpose: Guidance for Fundraising Professionals

June 22, 2015
By Margaret Coady, Alison Vultaggio

Margaret Coady, Executive Director, Coach

Margaret is Executive Director, Coach Foundation and Corporate Social Responsibility at Coach, Inc., a publicly-traded New York design house of modern luxury accessories and lifestyle collections for women and men employing 17,000 colleagues across locations worldwide.

As Executive Director of The Coach Foundation, Margaret works with the Foundation Board to deploy more than $5 million annually to high-impact non-profit organizations serving communities around the globe. The Coach Foundation's principal mission is help women to fully realize their potential and to improve educational opportunities for the underserved.

In her role as Executive Director of Corporate Social Responsibility, Margaret leads Coach, Inc.’s efforts at the intersection of corporate and community success, and develops opportunities for the company’s worldwide teams to participate in giving back to the communities in which they live and work.

Margaret has had a longstanding career of thought leadership in corporate community engagement, having served as Executive Director of CECP, a coalition of 150 CEOs united in the belief that societal improvement is an essential measure of business performance. At CECP for more than a decade, Margaret was instrumental in establishing the non-profit as the top forum for inspiring and challenging CEOs and corporate philanthropic leaders to align community initiatives with core business strategy. Highlights from Margaret’s contributions include the development of Principles of Social Investment with the United Nations Global Compact, the release of a dollar valuation for corporate pro bono service in collaboration with the Taproot Foundation, the forward-looking publications "Shaping the Future: Solving Social Problems through Business Strategy" with McKinsey & Company and “Business at its Best: Driving Sustainable Value Creation” with Accenture. She is also the creator of the ongoing “Giving in Numbers” report series and authored its first four editions.

A native of New York City, Margaret graduated with magna cum laude and Phi Beta Kappa honors from Williams College and was Valedictorian of her class at Columbia Business School. In 2013, she was one of 6 national finalists for the American Express NGen Leadership Award honoring nonprofit leaders age 40 or under who have demonstrated significant impact in addressing society's critical needs.

Alison Vultaggio: Manager, Strategic Engagement

As part of CECP’s Strategic Engagement team, Alison connects CECP’s community of leaders in corporate citizenship and philanthropy with the tools, best practices, and insights to accelerate progress towards their societal goals while driving business performance. A trusted advisor to the corporate giving community on topics such as employee engagement, signature program strategy and international grant-making, CECP’s Strategic Engagement team is the primary point of contact for leading practitioners in corporate societal engagement, levering the robust benchmarking, communications, and fast-track support and resources within CECP to advance company priorities. Alison works to set the agenda for the annual CECP Summit and facilitates peer-to-peer forums on emerging trends in the field including by industry, issue, and geography. Since joining CECP in 2009, Alison has played a critical role in CECP’s organizational and strategic planning as well as informing CECP’s programming and research, ensuring that CECP remains at the forefront of trends.Alison holds a BA in Corporate Communications from Manhattan College.

Corporate Giving: A Quick History

As recently as a decade or two ago, corporate philanthropy was typically dictated by the personal interests of the CEO or was handled reactively with grants flowing to worthy causes more or less in the order in which requests were received. Companies gave because it was ‘the right thing to do’ and often their giving was intentionally disconnected from the company’s expertise and assets—companies feared that being overtly strategic with their giving would incur a skeptical public backlash because philanthropy wasn’t perceived as ‘pure’ if the donor benefitted from it. Over time, the prevailing wisdom changed. Some companies became more widely recognized for their programs, grants started to make more intuitive sense (for example, a community bank funding a financial literacy program), and the practice of measuring a company’s giving across the enterprise became the norm. Increasingly driven by stakeholder expectations of transparency and consumer interest in seeing their values reflected by the brands they purchase, coupled with a positive public response to corporate support in the wake of natural disasters and humanitarian crises, the next wave in the evolution of giving was of companies conceiving of their giving as a portfolio, much like an investment portfolio, designed to deliver returns of different kinds. They began to co-create programs with nonprofit partners to achieve specific outcomes, accepted fewer (or no) unsolicited proposals, and thought about blending all of the company’s assets—cash, employee time, and product—in a single nonprofit relationship.

Along the way, companies began to see benefits—in addition to the societal benefits—of more thoughtful, holistic, and focused programs. A ‘business case’ emerged for selecting the right cause and geography—from increased employee engagement, improved community relations, better risk management, new business development, the creation of intellectual property and more. The aim became to operate in a virtuous cycle: achieving positive societal progress and business benefits at the same time, making corporate giving inherently more defensible and sustainable to a company’s owners.

A Look Ahead: Corporate Purpose

Going forward, we foresee companies building on this momentum by making corporate purpose central to how they talk about who they are, how they operate, and what they sell. Some companies are already leading with statements on the company’s values and reason for being—describing themselves as mission-driven, a term historically associated with nonprofits. Leading corporations, like Walmart, are outwardly expressing their philosophy that they exist “to serve society.” At the company’s 2014 Annual Shareholder’s meeting, new CEO Doug McMillon said: “We believe in Walmart's responsibility to lead on big issues, in big ways. It’s one of the reasons many of us love being part of Walmart. There are so many ways that Walmart can make a difference around the world. We're committed to doing just that.”[1]

From corporate websites that showcase societal causes on the home page to Super Bowl ads that encourage customers to “pay with lovin’” instead of money, companies are sharing their values and are aligning their grantmaking and volunteer programs with their larger purpose. While the resonance of any single company’s effort has varied based on the public’s perception of the program’s authenticity, the purpose movement is afoot.

In February 2015, CECP hosted its 10thannual meeting of CEOs; the theme was ‘Winning on Purpose.’ At that gathering of 40 global CEOs, 100% said that their company operates with some level of higher purpose. Consequently, corporations are gravitating to nonprofit partners that:

Focus on a particular societal issue that is material to the opportunities or threats to the future of their business

Can make productive use of the full scope of the company’s assets and expertise toward societal impact

CECP data, as captured in our free, annual Giving in Numbers report series, reinforces this shift, showing that individual grants are getting larger (the median grant size increased by 43% from 2010 to 2013), and corporate grantmakers are working with fewer nonprofit organizations (the median number of nonprofit partnerships per grantmaker fell 21% from 2010 to 2013).

Companies are no longer just engaging on issues that they can support, they are focusing on the issues that they can’t NOT support. Chairman and CEO of PepsiCo, Indra Nooyi, speaks out about PepsiCo’s leadership in global water stewardship as something that is essential to their purpose as a global company, saying, “There’s not enough money that we can give away to be viewed as a responsible company in 200 countries… So the only way it can work is to weave responsibility into the core business of the company.” [2]

What it Means: Guidance for Grant-Seekers

In this new era of corporate purpose, nonprofits seeking corporate support might consider the following ideas to align their excellent work with the new purpose agenda:

Showcase your relevance. Rather than anchoring your pitch on what the company has funded in the past, we suggest researching the potential threats and opportunities that are looming for the company, which will allow your proposal to be forward-looking. These issues are usually outlined in the materials companies share with their stockholders—10K SEC filings, annual letter to shareholders, etc. If there is alignment between your nonprofit’s future and the company’s future, use that overlap as a departure point.

Showcase your scalability. Large companies inherently have a scalability mindset and often expect their partners to share that orientation. Let your appetite for scaling inform which corporate partners you target. Outline the aspects of your nonprofit’s work that are (and aren’t) scalable, being honest about your limits and aspirations.

Showcase your complementarity. The best corporate-nonprofit relationships are more than the sum of their parts. Think about how your nonprofit might be the “missing piece” that a corporate donor is looking for—how might your assets and theirs blend to achieve something truly great? Partnerships like the one between FedEx and Direct Relief exemplify this complementarity. The organizations share a goal to strengthen healthcare systems worldwide. Their partnership leverages FedEx’s core competencies in logistics and transportation, and Direct Relief’s expertise in medical supply distribution.

Showcase your impact. Corporations are intensely interested in understanding the impact of their funding—both on society and to their business—because their stakeholders and shareholders demand transparency and accountability. According to CECP’s Giving in Numbers research, in 2013, 76% of corporate giving departments measured the outcomes and/or impacts of their grants. Nonprofits that are equipped to align on quantitative goal-setting and evaluation strategies are attractive to corporate funders.

Showcase your versatility. Pro bono support, board service programs, skills-based volunteering and product donations—companies are eager to blend these offerings to support their nonprofit partners. Is your nonprofit open to putting a mix of corporate assets to good use? While companies understand that cash is king, they like to amplify their impact with blended grants. For example, GSK operates a skills-based volunteer initiative called PULSE, in which motivated employees are matched to a non-profit organization for three or six months full-time, contributing their skills to help solve healthcare challenges at home and abroad. These employees lend the same expertise that they have been applying in their GSK roles in order to help non-profit partners. Since the start of the program in 2009, GSK has sent 486 employees from 51 countries to work with 92 nonprofits in 61 countries.[3]

While the evolution toward corporate purpose emphasizes the narrowing strategic focus of corporate giving, the good news is that the partnerships that do form are increasingly long-lasting and integrated—and less susceptible to cuts when the company experiences financial difficulty. The changing landscape of corporate societal investment is ultimately about solving societal problems with companies looking to be better, more complete partners in that process. Nonprofits that seek to work with companies will find that the right alignment can unlock resources and a level of commitment that was rare in a previous era.